Simple Keynesian Cross Model. Symbolically aggregate expenditure is expressed as. In the skm the condition for equilibrium can be expressed as.
Keynesian model with government. In the skm the condition for equilibrium can be expressed as. Imagine an economy with the following characteristics.
T taxes 0 3y.
Change in income due to change in government expenditure. The expenditure output or keynesian cross model the fundamental ideas of keynesian economics were developed before the aggregate demand aggregate supply or ad as model was popularized. This means that we have to find the point where planned expenditures are equal to gdp by finding where the planned expenditure line our c i g is actually equal to the gdp in the economy. Symbolically aggregate expenditure is expressed as.
